JCTR doubts authenticity of October inflation reduction

The Jesuit Centre for Theological Reflection (JCTR) has observed that the reported reduction in inflation does not reflect the current cost of living in Zambia.

According to the JCTR, the reduction must have been necessitated more by other factors than the reduction in the price of goods and services.

Jesuit Centre for Theological Reflection Acting Director, Faith Kalondawanga said this in a press release to ZANIS today.

Mrs. Kalondawanga said that the Central Statistical Office (CSO) confessed that prices of some commodities such as mealie meal have kept going up hence the reported reduction in inflation must have been influenced by other factors.

She added that while prices of some commodities may have reduced, it was doubtful that this could have caused such a significant reduction in the inflation rate.

She stated that in October 2015, inflation increased from 7.7 percent to 14.3 percent.

“Since then, we have been calculating annual inflation in relation to a significant low Consumer Price Index/base that obtained before October 2015 when inflation almost doubled,” she said.

Mrs. Kalondawanga further said that CSO will be calculating annual inflation on the basis of a higher monthly Consumer Price Index giving rise to a relatively higher consumer price index base which has a diminishing effect on inflation.

“Any percentage calculated on the basis of a higher denominator/base will have a reducing effect on the inflation,” she said.

She said it should also be noted that the recent increase in the cost of fuel has not been captured in the October inflation statistics but will surely be reflected in the November inflation statics.

“This is due to the time lag of pass through effects on fuel price adjustment,” she added.

Last week, the CSO announced a significant decline in the annual inflation rate, dropping by 6.4 percentage points from 18.9 percent in September 2016 to 12.5 percent in October the same year.